NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Hydrogen Infrastructure 

Expansion: Consumer Demand 

and Cost-Reduction Potential

Hydrogen Infrastructure Investment Forum—

Palo Alto, California

Dr. Marc Melaina

Senior Engineer

April 16, 2014

NREL/PR-5400-61966
2

Presentation Overview

• How much do consumers value hydrogen 

station availability?

• How much will station costs decline with 

volume?

• What kind of market growth is needed to 

ensure station cost reductions (and adequate 

return on investment, or ROI)?
How much do consumers value 

hydrogen station availability? 
4

Discrete Choice Consumer Survey

• Received ~500 responses 

from each city: 

• Los Angeles, CA

• Atlanta, GA

• Minneapolis, MN

• Seattle, WA

• Two choices:

1. Conventional vehicle

2. “Alt fuel” vehicle

Results are a “vehicle price 

equivalent” penalty against the 

price of a vehicle during the 

purchase decision.
5

Visual Maps Were Used to Convey Availability

Discrete choice algorithm varies coverage variables among 10 choices

Local Regional Interstate
6

Results Suggest Value of Stations to Consumers

Results

• Lack of stations at the local and regional 

level can incur a penalty of $4,000–$6,000 

against the vehicle price.

• Lack of stations along interstates between 

major cities (500+ miles) can also incur a 

penalty of $4,000–$6,000.

• Sufficient station availability may be 

comparable to an approximate $5,000–$10,000 

per vehicle price reduction.

• Analytic “cost-of-time” models suggest much 

lower penalties.
How much will station costs 

decline with volume? 
8

Quantitative Results from the 

Hydrogen Station Cost Calculator (HSCC)

HSCC 

Screenshot

• HSCC was administered 

anonymously by IDC Energy Insights. 

• Results were analyzed by NREL staff 

to develop a generic station cost 

equation:

• Economies of scale 

(station size)

• Industry experience 

(cumulative installed capacity)

• Results for state-of-the-art costs and 

three future costs
9

Quantitative Results: Capita per Capacity ($/kg/d)

Survey results and recent Energy Commission Awards 

suggest a 70% reduction in station capital costs by 2017–2020.
10

It’s Not Only Volume: Qualitative Workshop Results 

Indicate “How” to Pursue Cost-Reduction Opportunities 

Cost-Reduction Opportunities

1. Expand and enhance supply chains 

for production of high- performance, lower cost parts

2. Reduce cost of hydrogen 

compression

3. Develop high-pressure hydrogen 

delivery and storage components

4. Harmonize/standardize dispensing 

equipment specifications

5. Develop “type of approvals” for use 

in permitting

6. Improve information and training 

available to safety and code 

officials

7. Develop methods for planning 

station rollouts and sharing early 

market information

Full report: 

http://www.nrel.gov/docs/fy13osti/5

6412.pdf

0

2

4

6

8

10

12

14

16

18

0 10 20 30 40 50 60 70

Opportunities per Category

Number of Points

Stanardize, streamline

and facilitate permitting

Alternative and improved

station designs

Financial, policy or

partnership support

Sharing of information

and analysis

Leverage or synergy

with existing systems

and resources

Compression

systems

Infrastructure 

planning 

& integration

Standardize

station designs

Increase supplier base

Improve station utilization

Modular Stations Large capacity stations and components

Prioritizing Opportunities

Market Readiness Workshop, Feb. 2011
What kind of market growth is 

needed to ensure station cost 

reductions (and adequate 

ROI)? 
12

Approximately 400,000–800,000 FCEVs Needed by 

~2025–2030 to Achieve Cost-Reduction Opportunities

Growth

Comparing HSCC 

results to other 

estimates

Assumed demand 

scenario

Slower growth would result in lower ROI.
13

Cluster Strategy Focuses on High-Density Areas 

of Likely Early Adopters

Early Adopter Metric (EAM)
14

Cluster Strategy Focuses on High-Density Areas 

of Likely Early Adopters

Existing, Planned, and Proposed Station Locations
15

How Do Cash Flows Resolve Locally 

and Regionally? 

Regions are based on 

America 2050 Map: 

www.america2050.org

Interactive visualization tool

is in development

Cumulative cash 

flow @ $8/kg

Break even in 2021

Conceptual

and example 

results only
16

Summary of Key Points

• Station availability is critical to consumer 

choice and therefore market success.

• With volume, station capital cost reductions 

may be on the order of 70% below current 

costs. 

• Volumes (demand) required are on the order 

of 400,000 to 800,000 FCEVs deployed by 

2025–2030.
Questions? 
18

Characterization of Cost-Reduction 

Opportunity Priorities

Opportunities clustered and ranked according 

to workshop attendee votes on priorities

0

2

4

6

8

10

12

14

16

18

0 10 20 30 40 50 60 70

Opportunities per Category

Number of Points

Stanardize, streamline

and facilitate permitting

Alternative and improved

station designs

Financial, policy or

partnership support

Sharing of information

and analysis

Leverage or synergy

with existing systems

and resources

Compression

systems

Infrastructure 

planning 

& integration

Standardize

station designs

Increase supplier base

Improve station utilization

Modular Stations Large capacity stations and components

1) Station designs, 2), Streamlining of the permitting process,

3) Systems planning and analysis 
19

Infrastructure Expansion Models Have Both 

Technical Detail and Financial Analysis Capability

• Costs developed 

with “bottom-up” 

estimates at the 

component level, 

validated with real 

projects (CEC) and 

expert surveys

• Detailed spatial and 

temporal modeling 

across hydrogen 

supply chain

• Early adopter 

consumer data 

(demographics, 

etc.)

 

 .

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 .

New FCEVs

Hydrogen Demand

Refueling Stations

FCEV Garagings

Hydrogen Transmission

Cash Flow Components
20

Station Placement Algorithm 

and Detailed Financial Toolkit

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

2011201220132014201520162017201820192020

Production incentives

Credit card fees

Sales taxes

Income taxes

Depreciation expense

Retail markup (return on equity)

Interest

Selling and administrative

Licensing & permitting

Rent

Property tax and insurance

Maintenance

Labor

Feedstock & utilities

Sales revenue

Early stations placed near 

early adopter clusters 

and network expansion 

to provide coverage

Detailed financial 

breakdown, including 

influence of incentives
21

HCC Results Are Consistent With U.S. DOE Models 

and Estimate from the UC–Davis Rollout Study